...In early 2018, Huntington Beach, Calif.-based apparel designer and distributor Boardriders Inc. acquired Australian competitor Billabong International Ltd. The acquisition added brands such as Billabong, Element, and RVCA to the Boardriders portfolio alongside other well-known action sports brands Quiksilver, Roxy, and DC. Because of the similarities in the businesses and the added scale from the combination, Boardriders is cutting costs by consolidating facilities, reducing headcount, and renegotiating contracts with vendors. These actions should result in a significant improvement in margins and cash flow once the restructuring is completed, but free cash flow was negative in fiscal year ending Oct. 31, 2018, and we expect it to be negative again in fiscal 2019 while the company continues to spend on restructuring in order to achieve the synergies. By 2020, we expect a significant improvement in credit measures, including free cash flow of more than $50 million and debt leverage in the...
